No.180 17 February 2003 Essential Information on an Essential Issue

of key events over the last few weeks.




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30 January 2003

Minister of Tertiary Education Steve Maharey says that the government will be setting maximum tertiary course fees so that students and their parents will know when they start a course what the overall cost will be. Maharey also says a review of the student loan and allowance schemes will be completed by June and is likely to recommend a wider range of students will be eligible for the student allowance.

The government initiates a student levy and a tax on tuition and course fees on institutions that provide teaching services to fee-paying foreign students. While the money is earmarked for industry development, The Independent comments that no such industry development taxes apply to any other export industry.

31 January 2003

Legislation Direct, previously the Government Printing Office, closes its doors after 136 years as printers to the government. Builders are struggling to meet demand as building consents reach a 16-year high. The Master Builders Federation says that the shortage of tradespeople is commonly causing delays of six months for work to start on a new house. International equity funds devalued by 28% last year. For NZ investors this translates into a $1.5 billion devaluation of their international fund investments.

1 February 2003

A promising catch of Omega prawns has raised hopes of a prawn processing industry in the South Island. Vela Fishing manager Chris Ludeke speculates that a South Island prawn industry could employ 200 people. Dow Chemical announces new international job cuts of between 3,000 and 4,000 people.

2 February 2003

Council of Trade Unions president Ross Wilson calls for schemes to provide unemployed workers with the skills to enable them to fill the shortages in the labour market.

3 February 2003

100,000 activists, NGO campaigners, academics and trade unionists from more than 130 countries attend the third World Social Forum in Brazil. The Forum is held as a people-based alternative to the World Economic Forum attended by finance and business leaders in Switzerland.

NZ companies devote just over one day a year to training their employees. Globally, businesses provide three days training per year according to PriceWaterhouseCoopers.

4 February 2003

The National Party caucus outlines social policy changes it is considering. These include putting time limits on benefits, requiring beneficiaries to have their children immunized, and resurrecting work-for-the-dole.

The Engineering Printing and Manufacturing Union calls for employers to invest more in training. Union secretary Andrew Little says that while workers welcome pay rises, they also want to see the long-term viability of their jobs and industries strengthened through a well trained workforce.

The Ministry of Social Development says it will help sheltered workshops meet their obligations when disabled staff are no longer exempted from minimum wage and holiday provisions.

Last year, for the first time, annual tourist numbers to NZ topped 2 million.

WorldCom, the US company that last year filed the world’s largest bankruptcy application, says it will cut staff by 5,000. Economists say the US economy is holding its own but is not creating jobs. Royal Bank of Scotland economist Ram Bhagavatula says that US manufacturers are making more with fewer people.

5 February 2003

While inflation rose 2.6% last year, on average, workers pay rates rose by only 2.1%. According to Statistics NZ, 43% of NZ workers had no rise in pay at all.

The number of hours NZ’ers worked last year increased by 3.9%.

An OECD report claims NZ has the highest youth suicide, offending and cannabis use rates of the 31 countries measured. NZ’s Principal Youth Court Judge Andrew Becroft discounts the report as unreliable because it is based on six year old information and does not compare “like with like”.

The Consuming Industries Trade Action Coalition in the US says that the implementation of 30% tariffs on imported steel to the US last year cost 200,000 jobs in small US companies. The CITAC argues that these job losses exceed the number of people who work in the steel industry that the tariffs were meant to protect.

6 February 2003

A Child Poverty Action Group survey finds that primary school aged children in poor families change schools at least once a year and this has a detrimental effect on their education. The survey identifies lack of home ownership is a major contributing factor to this transience. German unemployment reaches 11.1%.

7 February 2003

Job losses appear likely in Taranaki as the Maui gas field is estimated to have a shorter lifespan than expected. Major gas user Methanex has made no job cut announcements yet but says it will halve production this year.

The Social Entrepreneur Fund, designed to help foster community sector “champions”, is broadened beyond employment and economic development to include people who have backgrounds in youth, welfare, health and education. The fund is administered by CEG.

8 February 2003

A Monash University report forecasts that 70,000 Australian workers will lose their jobs due to the most severe drought in Australia since European settlement.

10 February 2003

The government publishes a list of 10 “guiding principles” it says it will follow as it reviews what new NZ service sectors it intends to offer up to global competition through signing a General Agreement on Trade in Services.

The Council of Trade Unions asks the government to put back the 31 March signing of a new GATS agreement. The CTU argues that because the government has yet to publish its position paper on the treaty, time will run out for public debate and submissions before the deadline.

Free medical healthcare clinics are now operating in 18 Waikato secondary schools. The scheme is an extension of free GP and counseling services provided to low- to medium-decile schools already operating in Rotorua, Gisborne and Wellington.

The cost to high school students of getting their National Certificate of Educational Achievement will rise to $150 starting this year. Some principals report that even at last year’s rate of $80 - $100, some students abandoned their NCEA credits because they could not afford to pay for the qualification.

11 February 2003

The NZ unemployment rate drops to 4.9%, the lowest rate in 15 years. (see this issue)

12 February 2003

The OECD apologises for misrepresenting NZ as having the highest youth offending and suicide rates. The OECD admitted it had not collected comparable information on youth crime from member nations. It also agreed that the published youth suicide rates were out of date .

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  • It’s the best employment news in fifteen years: we’ve broken the 5% barrier in our unemployment rate, and now have less than 100,000 people officially out-of-work.

    New Zealand has now had four and a half years of good job growth, with 165,000 jobs created since June 1998.

    — the official unemployment rate for the December 2002 quarter is 4.9%, after dropping 0.5% from the 5.4% rate last September. New Zealand was last below the 5% level in March 1988.

    — the number of official unemployed is now at 98,000 people, a fall of 8,000 people from last September .

    — The quarterly fall was driven by a drop in unemployment for people aged 20-29 years, traditionally a volatile age group in the statistics, and possibly explained by changes in the labour market status of students. According to Statistics NZ, the previous quarter’s rise in unemployment was driven by an increase in unemployment among this age group.

    — The growth of the working-age population has doubled in the last year, increasing by 59,000 in 2002, compared with 31,000 in 2001. Statistics NZ says that half of this increase (30,000) has come from net immigration.

    — Unemployment rates have declined for all Maori and Pacific people over the last year, although they still remain very high. Maori unemployment is at 11.4% (down from 12.9% a year ago) and Pacific Peoples 8.2% (down from 9.9%).

    — long-term unemployment still makes up a greater proportion of the numbers unemployed, with the numbers of people out-of-work for over six months rising from 29.6% to 30.1% during the last quarter.

    — New Zealand is now experiencing one of the lowest unemployment rates in the OECD. We are significantly below the OECD average of 7.1% and are now ranked ninth amongst the 27 nations with standardised unemployment rates. NZ’s rate of unemployment is lower than all our major trading partners, including the United Kingdom (5.1%), Japan (5.5%), the United States (6.0%) and Australia (6.2%)

  • Social Services and Employment Minister Steve Maharey is naturally pleased with the latest figures, and he points out that there are now 123,000 more New Zealanders employed than there were when the Labour-led government took office in December 1999. Maharey: “Continued growth in the number of people in work will be welcomed by all New Zealanders. However, as has always been the case, we do need to work hard to share the benefits of our growing economy fairly...”

    Economic Development Minister Jim Anderton believes that booming regions and economic optimism are behind the continuing low unemployment rate. Anderton: “Up and down New Zealand there are skills shortages and new jobs being created every day ... New Zealand is well on its way to being the Pacific Economic Tiger with growth in jobs, flourishing of new ideas and innovative businesses and regions. This is just the beginning of an economic upturn that can make New Zealand one of the best performing countries in the OECD.”

    Sources – Statistics NZ Household Labour Force survey for December 2002; Press Release Steve Maharey 11 February 2003 “Government welcomes fall in unemployment”




    Unemployment Rate

    Sources – Statistics NZ Household Labour Force survey for December 2002


  • Are the benefits of our growing economy being shared fairly? The Jobs Letter has taken a look at just who have got the new jobs over the last four and a half years (see tables, below). The results reveal some good news ... and also some major concerns:
    — over a third (72,300 or 38%) of the new jobs have gone to Maori and Pacific people.

    — only 26,200 (or 14%) of the new jobs went to young people under the age of 25 years.

    — two thirds (126,800 or 67%) of the new jobs have gone to people aged 45 years and over.

    — women have gained slightly more of the new jobs than men.

    — more full-time new jobs have been added than part time jobs.

    — Canterbury is the powerhouse of job creation since June 1998, adding 54,700 jobs to the local economy (an increase of 24%). Taranaki (22% increase) and Wanganui/Manawatu (20% increase) are also major job creators. Auckland had an increase of 53,800 new jobs (10%)

    — Wellington, Nelson, Malborough, the West Coast and Southland had no significant change in employment numbers during the last 4 ½ years.

    — the Health and Community Services sector has created the most jobs, growing their workforce by a third since June 1998. Agriculture, Forestry and Fishing, and the education sectors have also shown significant gains.

    — the Manufacturing sector has recorded only 1% gain in the last 4 ½ years.

    — despite the 165,000 new jobs since June 1998, the official unemployment figures have only fallen by 33,000 people.

    — an increasing percentage of the unemployed are under the age of 25 years, rising from 35% to 42%.
    Source – Statistics NZ Household Labour Force Survey for December 2002
    thousands (000) June 98 Dec 02 difference
    Total Employed
    (seasonally adjusted)
    1,721 1,886 165
    Men 948 1029 81
    Women 773 857 84
    Full Time
    (thirty hours or more)
    1,320 1,461 141
    Part Time
    (fewer than thirty hours)
    398 424 26
    thousands (000) June 98 Dec 02 difference
    Unemployment Rate
    (seasonally adjusted)
    7.6 4.9 -2.7%
    Total Unemployed
    (seasonally adjusted)
    131 98 -33
    % of 15-24 yr olds unemployed 35% 42% 7%
    THE EMPLOYED (by Age Group & Maori and Pacific)
    thousands (000) June 98 Dec 02 difference % of total
    Total Employed
    (not adjusted)
    1,716.3 1,905.1 188.8
    15-24 yr olds 295.3 321.5 26.2 14%
    25-44 yr olds 851.2 887.1 35.9 19%
    45+ yr olds 569.8 696.6 126.8 67%
    Maori and Pacific People 201.6 273.9 72.3 38%
    THE EMPLOYED (by Region)
    thousands (000) June 98 Dec 02 difference % of total
    Northland 51.7 57.8 6.1 +12%
    Auckland 525.5 579.3 53.8 +10%
    Waikato 152.9 178.3 25.4 +17%
    Bay of Plenty 93.3 105.5 12.2 +13
    Gisborne-Hawkes Bay 79.3 84.5 5.2 +7%
    Taranaki 43.9 53.5 9.6 +22%
    Wanganui-Manawatu 89.2 106.9 17.7 +20%
    Wellington 239.4 236.2 -3.2 -1%
    Nelson-Marlborough-West Coast 79.5 80 0.5 +1%
    Canterbury 226.3 281 54.7 +24%
    Otago 85.4 93.6 8.2 +10%
    Southland 49.8 48.5 -1.3 -3%
    THE EMPLOYED (by Sector)
    thousands (000) June 98 Dec 02 difference % of total
    Agriculture, Forestry & Fishing 139.5 160.4 20.9 +15%
    Manufacturing 286 287.7 1.7 +1%
    Construction 111.9 128.1 16.2 +14%
    Wholesale & Retail 377.9 425.3 47.4 +13%
    Transport, Storage
    & Communication
    100.9 110.5 9.6 +10%
    Business & Financial Services 243.1 267.6 24.5 +10%
    Education 128.1 147.7 19.6 +15%
    Health & Community Services 125 165.8 40.8 +33%
    Other Services 184.5 197.2 12.7 +7%


  • Economists surveyed by a Dow Jones Newswire expressed some surprise at the low NZ unemployment figure. The concensus amongst economists from leading banking and investment firms had forecast the unemployment rate to remain at 5.4%.

    Infometrics senior economist, Tony Booth, believes however that the unemployment rate could also drop further — possibly to as low as 4.5% by the start of next year. Booth: “It depends to a great extent on how much migration stops. The government has taken some measures to tighten up on migrants coming in, in terms of English language requirements and so on ...”

    Wages are generally expected to start rising if unemployment remains below 5%, although they grew by just 2.1% last year compared to inflation of 2.6%. The economists surveyed by Dow Jones have commented that inflationary pressures from the growth in employment are being negated by the strong NZ dollar, and concerns about the world economy.

    Sources — Dow Jones Newswire 10 February 2003 “NZ jobs growth likely to remain robust in 4Q” and 11 February 2003 “NZ Jobs Data underline 1H Rate Cut unlikely”; NZPA 12 February 2003 “Unemployment rate falls to 15-year low” by Melanie Carroll.

  • The CTU has also welcomed the drop in unemployment to below 5%, saying that the fall also shows that government policies such as increasing the minimum wage are compatible with falling unemployment.

    But CTU Economist Peter Conway says that the level of 98,000 people unemployed is still far too many given the strong demand for workers. Conway: “While in a dynamic labour market there is some unemployment as people move between jobs, there is clearly a contradiction when we have employers calling out for workers, but there are still nearly 100,000 out of work.” Conway says the answer lies partly in much better targeting of the training needs for the unemployed, and more assistance in the transition to work.

    Source – Press Release CTU Peter Conway 11 February 2003 “Still Too Many Unemployed – CTU”

  • The Act Party disputes the latest statistics and says there may be as many as 37,000 New Zealanders not being properly counted. Muriel Newman, Act spokesperson on Social Welfare, says that the government’s claim that only 5,400 New Zealanders have been unemployed for more than two years is “totally misleading”.

    Newman points to official answers to her parliamentary questions which show that more than 42,000 NZ’ers, who are currently on the dole, have been paid benefits for more than two years. Newman: “ It is, therefore, deeply disturbing to discover that there are 37,000 New Zealanders who now appear to be missing. My question to the government is: where are they? They do exist. They are real people, who have been on benefits for more than two years — yet have not been incorporated into Government statistics...”

    Newman’s view is that the Labour government is “hiding behind the smokescreen of the Labour Force Household survey — which does not count people as unemployed if they are not actively seeking work, or have worked for more than one hour in the past two years.”

    Source – Press Release Muriel Newman 12 February 2003 “Government loses unemployed”


  • Job advertisement levels for January 2003 are up 7.5% compared to the level in January 2002, but are 6.6% below their peak levels in July 2001.

    The ANZ job ads series reports that there is a growing dichotomy between job ads in Auckland and in the rest of the country. Auckland job ads were up 30.1% on levels prevailing at the same time last year. But all other regions, except Christchurch, have recorded a fall in job advertising levels over the year.

    ANZ Chief Economist David Drage: “After a period of robust growth, activity in some provincial centres has plateaued as the headwinds of a difficult international environment and recent strong gains in the Kiwi dollar feed through to rural incomes. To the extent that this has been reflected in job ad trends, the contrasting regional developments suggest that employment growth over the year ahead will be increasingly driven by Auckland…”

    Source – ANZ Job Ads survey for 12 February 2003 “Auckland to drive further employment growth” by David Drage

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    We are funded by sustaining grants and donations. Yes, you can help.